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Sears Holdings Severs Ties With Paula Deen

SAN BRUNO, CA - MARCH 24: The Sears logo is seen on the side of a store March 24, 2005 in San Bruno, California. Shareholders agreed on Kmart Holding Corp.'s $12.3 billion acquisition of Sears, Roebuck and Co., helping the two struggling rivals to combine into the nation's third-largest retailer. (Photo by Justin Sullivan/Getty Images)

Sears Holdings Corp. announced Friday that it is cutting ties with the Southern celebrity chef, adding to the list of companies severing their relationship following revelations that Deen used racial slurs in the past.

The company, based in Hoffman Estates, Ill., said Friday that it decided to phase out all products tied to the brand after “careful consideration of all available information.”

“We will continue to evaluate the situation,” said Amy Diamond, a spokeswoman at the parent company of Sears and Kmart stores.

Both Sears and Kmart sold Paula Deen products.

Sears joins Wal-Mart Stores Inc., Target Corp. and Home Depot as retailers that plan to stop selling cookware and other items with Deen’s brand.

Meanwhile, on Thursday, Novo Nordisk said it and Deen have “mutually agreed to suspend our patient education activities for now.” Deen, who specializes in Southern comfort food, had been promoting the company’s drug Victoza since last year, when she announced she had Type 2 diabetes

On Monday, pork producer Smithfield Foods dropped her as a spokeswoman.

Caesars Entertainment also announced that Paula Deen’s name is being stripped from four buffet restaurants owned by the company. Caesars said that its decision to rebrand its restaurants in Joliet, Ill.; Tunica, Miss.; Cherokee, N.C.; and Elizabeth, Ind., was a mutual one with Deen.

Last week, the Food Network said that it would not renew her contract.

The stakes are high for Deen, who Forbes magazine ranked as the fourth highest-earning celebrity chef last year, bringing in $17 million. She’s behind Gordon Ramsay, Rachael Ray and Wolfgang Puck, according to Forbes.

Deen’s empire, which spans from TV shows to furniture and cookware, as well as restaurants in Savannah, Ga., generates total annual revenue of nearly $100 million, estimates Burt Flickinger III, president of retail consultancy Strategic Resource Group.

But Flickinger says that the controversy has cost her as much as half of that business. He also estimates that she could lose up to 80 percent by next year as suppliers extricate themselves from their agreements.

Still, book-buyers are so far standing by Deen. As of Friday morning, “Paula Deen’s New Testament: 250 Recipes, All Lightened Up,” remained No. 1 on Amazon.com. The book is scheduled for October. Another Deen book, “Paula Deen’s Southern Cooking Bible,” is No. 2. Several other Deen books were out of stock.